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Oil Plunges As Oil Rig Count Rises To Seven Month Highs

This week Baker Hughes reported that two additional oil rigs went online in the United States, making it the fourth straight week of increased oil rigs, and 13 straight weeks of no-decline.

At 418 active oil rigs, the count has not been this high since the oilfield services company’s 12 February report.

The natural gas count saw a three-rig rise, recovering the three rigs it had lost in the week prior.

Several states gained one or two rigs this week – Alaska, California, North Dakota, Oklahoma, Pennsylvania, and Texas. Louisiana, New Mexico and West Virginia each lost a single rig.

Texas’ two major basins – The Eagle Ford and the Permian – each lost one rig. Cana Woodford, Marcellus, the Mississippian and Williston gained one site each.

The domestic oil rig count now stands at 418; this time last year, 641 oil rigs were active. The depleted gas count tells the same story; currently 92 gas rigs are in production – a figure 105 fewer than the amount of gas rigs active at the same time last year.

Zero Hedge noted that oil prices had been in a down swing after Saudi Arabian and Iranian officials said they did not expect an output freeze deal to come to fruition during next week’s OPEC meeting in Algiers. The geopolitics of the civil wars in Yemen and Syria, as well as disagreements regarding the method of determining output levels during the length of freeze, caused the officials’ concern.

Brent barrel prices stood at $45.91 at the time of the report’s writing, and West Texas Intermediate traded at $44.51—a fall from Wednesday’s price after EIA inventory data revealed a massive 6.2 million barrel draw to crude inventory. Following the EIA’s report, West Texas Intermediate traded at $45.23 a barrel while Brent traded at $46.89.